Merry Christmas, Diana

I knew what and why, but I didn't know when, how, or where. I wasn't nervous. The experience was surreal and life changing. It wasn't the place or time that was important. It was all the events and feelings leading up to it. The circumstances felt right... again not necessarily because of the time or place, but more because of our circumstances. We were alone (for the most part) and all of the other restaurants were closed, but that didn't seem to matter because we were together and can handle anything... together. We braved the birth of our first child together without being married... easily the scariest thing for me and anyone who hasn't been through it before.

You and Elek are THE best thing that has EVER happened to me. Without both of you, I would be lost. You give me strength and encouragement to do things I never thought I could do. It is hard to believe that this is our third Christmas together, though I couldn't imagine it any other way. Your aura is unlike anyone else's I've ever seen and I knew you were special from the start. I knew that you had so much to teach me.. and now we have a little one teaching us both a new meaning of love, understanding, persistence, endurance, and happiness to name a few. You made all of this possible and for that I am truly grateful. I hope your Christmas is relaxing and better than any before it. With love,

Peter

Some Music

I thought I'd post some music for your enjoyment. The first song is geek synth which I've been missing lately.
Chairs in the Arno - Size Thirty

For the next song.. just think Bobby McFarin + Sliding Guitar + Organ + low fi pop. I know.. ridiculous.
Benji Cossa - Sunset

Back later with more.

M.I.A. - Paper Planes

Quarterlife

Quarterlife is the name of a show that is directed by Marshall Herkovitz who produced "My So Called Life". I must say I went from liking it (the first several episodes) to not being so sure, then to liking it again. It has been picked up by NBC apparently.. I hope they don't screw it up. Hope you enjoy.

Lykke Li - Little Bit

What do you do?

What do you do when your life goes through a transition and you wake up one day, nothing is the same, and you wonder what just happened? When going out to bars was 'the thing' to do on the weekend. How do you transition to something more wholesome? It's inevitable and deep down you know it, though you don't know how to transition slowly. All is not gone or lost, actually quite the opposite. You are starting to really live. Priorities change and it will be wonderful, but what to do in the meantime?

Drop Aural Review

I've decided to drop Aural Review as far as putting music on it. I know I haven't posted on here in forever and I'm hoping if I drop the other one maybe I can post music stuff here too. It will at least make it more interesting.

In other news, I left my job at FedEx and got a new one here at Securas. So far so good.

I found some interesting music lately. One is listed on this page to the right. You can find their music on MySpace or on this site I love to frequent called 3hive.

Also some other interesting music I found is streaming here. Not to mention a great internet radio station to listen to at work is Radio-Indie-Pop, IndiElectronica Radio, and one of my favs Pandora. Hope this holds you over for a while.

Tax-Free Real Estate Investments

I'm going to summarize the book The Insider's Guide to Tax-Free Real Estate Investments by Diane Kennedy and Dolf De Roos by section.

Section 1

Basically this is the introduction to why the current retirement plans won't exactly make you rich easily. We all (should) know there are the the basic retirement plans such as 401(k), IRA, and Roth IRA. This books describes these plans and some new plans that have a tax advantage that go along with them. It also mentions the Alternative Minimum Tax (AMT), which is a tax between 26% and 28% of your adjusted gross income. To help avoid this tax, this book introduces the Solo 401(k) and the Solo Roth 401(k) retirement plans.

Section 2

This section talks about the different kinds of income including Earned Income, Portfolio Income, and Passive Income. The book mentions "The Jump Start Program" which consists of the following steps:

1. Create a business, and maximize your business income with tax loopholes.
2. Maximize your tax-free benefits with tax loopholes by discovering your hidden business deductions.
3. Once you have minimized your taxes from your business, pay your taxes.
4. Invest in real estate, and maximize your real estate investments with real estate loopholes.
5. Maximize your cash flow with real estate loopholes.
6. Buy a house, and maximize your home investments with home loopholes.
7. Get money out of your house! Maximize your cash flow with home loopholes.

Something else worth noting here is the two-out-of-five-year rule which says once you have lived in your home for at least two years out of the preceding five years, you can sell the property and take the first $250,000 in gain tax free (or $500,000, if you're a married couple filing a joint tax return).

Two Ways that Tax-Deferred Plans Can Get You

1. If your tax bracket is low now but will be higher later, you've traded a low tax for a high tax.
2. If the income you're deferring is considered long term capital gains (from the sale of assets held over 1 year), you've traded capital gains income tax (maximum of 15%) for ordinary income (maximum 35% tax rate).

This section of the book describes the differences between several different plans, the most important of which were listed earlier in my summary(Solo 401(k) and the Solo Roth 401(k)). I also wanted just to mention the Education (Coverdell) IRA where you can contribute a maximum of $2,000 per year for each beneficiary.
There are three basic rules for the two pension plans which I mentioned above (Solo 401(k) and the Solo Roth 401(k)):

1. You and your spouse are the only full time employees allowed.
2. You have to draw a salary from the business.
3. You have to contribute the right kind of income.

For these types of plans you must receive income through either a Sole Proprietorship or a (S or C) Corporation. The book describes in more details the above mentioned pension plans and then lets the reader know why they beat the other plans. The Solo Roth 401(k) has no income limitation, you can put away a significant amount into a Roth fund (for 2006 $15,000 per year or $20,000 if you're over 50), you can use your tax free Roth funds to invest in things you couldn't before like S Corporation stock or life insurance policies, you can borrow up to $50,000 or 50% of your plan's value, there is no mandatory distribution requirement for your Solo Roth 401(k).

Section 3

This section describes things you can and can't do/invest in with your Solo Roth 401(k).

You must find a custodian to hold your pension assets and administer your pension funds so that you stay within compliance with the IRS. These are the questions you should ask and the answers you should get:

• Will the custodian allow you to invest in real estate and businesses? Yes.
• Is your proposed custodian government regulated? Yes.
• How much malpractice insurance does your proposed custodian have? Enough. This is important because the IRS is very unforgiving.
• Who are your proposed custodian's auditors? What does their last audited financial statement show? Ask for a copy and make sure that the auditors did not include any comments of concern.
• Does your proposed custodian offer ongoing client education? Yes.
• Ask about standard operating procedures and time requirements for new account setup, transfers, purchases, sales, funding, distributions, IRS reporting, statement productions, and phone contacts.
• How much are your proposed custodian's fees? Preferably a flat fee.

Avoid Prohibited Transactions

• The sale, exchange, or lease of any property between a plan and a disqualified person.
• The furnishing of goods, services, or facilities between a plan and a disqualified person.
• Using any portion of your pension fund as security for a loan of a disqualified person.
• Use of income or assets of a plan by a disqualified person for his or her own profit.

Disqualified Persons

Direct line relatives (parents, grandparents, or children) are disqualified persons.

Prohibited Investments

• Collectibles such as art, rugs, antiques, metal, gems, stamps, coins, alcoholic beverages, or other tangible personal property
• Life Insurance

Section 4

The problem with being self directed is that you must have a plan administrator to purchase and sell your investments and since they are not available 24/7/365, this may slow down your response time to some investments. There is, however, a way around this by using a IRA or Tax-Free LLC. This method allows you to use your pension plan in conjunction with your LLC. The LLC is important because it limits your liability to that which has been invested into it and it also allows you to personally manage your funds faster. The LLC usually should be set up in the state in which the investment such as property is. It is very important how you set up the LLC, because otherwise you could suffer a hefty fine or two. I won't go into it, but the most important thing is to set up the Tax-Free LLC where you are the only manager (no salary) and your pension plan is the only member. The LLC is then funded by your pension plan and you can act as the manager to direct the funds into the investments we discussed above. But be very careful when signing checks to make sure you sign it as the manager of the LLC and not with your personal signature! It is also still very important to let your plan administrator know what you're doing. You will be held responsible for making prohibited investments, not your plan administrator. Many more important details for this section need to be read in the actual book as it would take too long to summarize them here.

Section 5

This section is about leveraging the money you have in your pension fund or LLC. Essentially it says that if you don't have enough money to buy a property (investment) out right, then a bank can loan you a money. Typically they want you to put at least 30% down and they will loan you 70%. This is called a 70% non recourse loan. One downside of leverage in an IRA LLC is that you are subject to a Unrelated Debt Financing Income Tax(UDFI) and Unrelated Business Income Tax(UBIT) tax on the percentage of the profit made from the portion of the investment funds that was loaned to you.

Section 6-7

The rest of these short sections discuss what type of investment is a good investment, what types of property to buy, etc. I won't go into this details, because it doesn't exactly relate to why I read this book.

All in all, this book was very informative and up-to-date, which is more than I can say for a lot of books I read. This field is constantly changing which makes it hard to keep up with all the information. Hopefully now you'll know enough to at least ask pertinent questions to accountants, plan administrators, etc. Read the rest of the book and leave a comment if you like.

Exercise Your Mind (Mind/Matter)

Today I finished Rich Dad Poor Dad by Robert T. Kiyosaki. I actually read it in ebook (a pdf) on my computer in two days. I like the ideas presented in it and I see a similar trend in most of these books which is investment, specifically in revenue generating real estate. While my father was a commercial real estate appraiser in Memphis, he never really invested in real estate with one exception. That one exception had at least a 2000% return. Why he didn't do more of that, I will never really know. He said he wasn't interested in it, but clearly he had the knowledge to be able to do it... and successfully.

I, in my quest for knowledge, have been picking up more and more books and reading them faster and faster. I started The Tipping Point by Malcolm Gladwell two days ago and right after that I started and finished Rich Dad Poor Dad. I also downloaded several audio books that I can listen to in my car on the way to and from work and to and from midtown including Freakonomics by by Steven D. Levitt and Stephen J. Dubner, The 4-Hour Work Week by Timothy Ferriss, and Think and Grow Rich by Napoleon Hill. I am also looking for 16 Percent Solutions by Joel Moskowitz and Beating the Street by Peter Lynch. I think I've become a little obsessive, but that's ok. There are much worse things to be obsessed with like Unreal Tournament, Grand Theft Auto, or drinking.

All of this talk of reading made me think of the time when I told my mom, "I hate reading." That was the dumbest thing I've ever said. I'm pretty sure I meant reading subjects that I'm not interested in, but that is still stupid. Now I love reading.. especially those subjects I'm interested in and some that I'm not. It exercises your brain and makes you want to read more and more. I'm just hoping I can implement some of these principles that I'm learning. That's when the real learning starts.

Memorial Day Weekend

Friday, May 25, 2007

Diana, Elek, and I had a couple people over for a relaxed cookout. This may have been apparent to everyone but me, but you're supposed to season the hamburger meat then mix it all together and grill it. That way the meat is seasoned on the inside. I feel like somewhat of an idiot since I can cook... at any rate, I'll know how to do it better next time.

Saturday, May 26, 2007

Diana, Elek, and I left Memphis around 10:00 AM and drove toward Jonesboro, AR. We got to Lake Thunderbird around 1:30 PM. Jake Mohundro (friend of Diana's family) has two lake houses and a couple of boats. We rented our own house and got to ride in a pontoon boat and do some tubing. This was Elek's first time in lake water. We bought him a little turtle floatie. He didn't really know what to think. It was also his first boat ride and he HATES the life preserver! Going to the lake was very relaxing.

Sunday, May 27, 2007

Diana and I dropped off Elek at my mom's house so we could go eat at Bluefin at 6:00 PM with Connie and Adrienne. It was really good. We also went to see India Arie at the Orpheum at 8:00 PM. It was an awesome show. I wasn't really a huge fan of her music, but I really enjoyed her show and I became a bit more open to her music. After the show we went to Celtic Crossing for a bit and hung out. Finally we retired about 1:30 AM. So far, it's been a fun filled, excellent weekend. Tonight is the Jolley's house at 6:30 PM or so and I'm really looking forward to that. :D

The Meaning of Life

So I dropped off the face of the planet (in the blogosphere) pretty much since my son, Elek was born. I finally decided to pick back up.

My friend Chris and I were talking the other day about what we want to do with our lives. Currently, the one bad thing about my life is my job. Chris currently doesn't have a job (lucky him) and doesn't want one similar to the kind of dream job I'm hoping to secure. He wants to promote the freedom of information through a serious of papers and lectures, somewhat following in the footsteps of Richard Stallman, who some consider somewhat crazy. This is beside the point. Chris brought up the fact that he doesn't really want to work, but to discover the secrets of the universe, study quantum physics, and try to extract the meaning of life from life itself. That got me thinking and I don't think I've stopped since he said that. In the back of my mind that question has been there for quite some time as it is for many people. "What is the meaning of life?"

I think for each individual the meaning of life can be quite different. I recently discovered the meaning of life while feeding my 7 and a half month old son. It is simply him. He is the meaning of my life. He is the reason I strive to be better. He is the reason I want this country to turn itself around. And he is the reason I named my business Elek Technologies. While I was thinking this, I took one step back and thought that perhaps the meaning of life for all of mankind... the real meaning of life is life itself. To live life. To create life. To enjoy life.

Tonight I rewatched one of my favorite movies American Beauty and was reminded of what really matters in life when Lester shouts "It's just a couch!" followed by "This isn't life, it's just stuff." Money is not the answer, though I can see how someone could easily slip into that mindset. Happiness is the answer. Living life is the answer. And preserving that which makes us happy is the answer.

Mind Dump

Attorney General Alberto Gonzales should step down for firing nine of the U.S. Attorneys for political reasons, lying under oath, and being incompetent. Hopefully there will be a no-confidence vote and he will be forced to step down.

The RIAA is evil and will eventually self destruct and implode. The reason I say this is because they are attacking everything that helps spread the music that pays their bills, from internet radio to regular radio. There is only one path that I see them taking and it's straight down the drain while more 'indie' music replaces the mainstream. Since equipment and the such is getting cheaper, then more bands can afford to go without a large record company. Their position is being phased out and they're helping to do it. Bravo!

In other news in the great state of Tennessee, a pornstar was pulled over and found to have illegal drugs in her possession and the TN state trouper accepted sexual favors in order to turn a blind eye.

Investing 2nd Edition

So now that I've read books like All About Asset Allocation by Richard Ferri, The Bull Hunter by Dan Denning, Rule #1 by Phil Town, The Intelligent Investor by Benjamin Graham, The Five Temptations of a CEO by Patrick Lencioni, and Creating Wealth by Robert G. Allen. One of the better ones for me was The Bull Hunter. The others market themselves by making the consumer think by reading them, the consumer will somewhat automatically become a millionaire. This is not the case. While that may be obvious to some, it's not nearly obvious enough to many. Not to say that these books can't help you understand more about how to create, build, and maintain wealth. They can, but they're not going to give you the exact recipe to do so.

I have discovered, at least for me, through reading these books that I do NOT want to spend my time investing in individual stocks. In my opinion, it's a waste of time for me and I don't enjoy it that much so it's not really worth doing. Of course to every rule there is an exception and mine is MySQL. When MySQL goes public I will be investing in it. I believe in Open Source and free software AND I've used it so much that I want to have a stake in its future. At any rate I'm done for the most part with individual stock investment. edit: I am much more interested in Mutual funds for their increased diversification and security. There is a lot of potential there. /edit